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San Francisco 17, Us 13, Chiu 8, Stevenson 6, California 3, Puc 3, Campos 3, Mitch 2, Kim 2, Melanie 2, The California 2, Avalos 1, Chu 1, Lee 1, Carmen Chu 1, Wiener 1, Jeff Anderson 1, United States 1, Mar 1, Brewers 1,
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  SFGTV    [untitled]  

    November 13, 2012
    2:30 - 2:59pm PST  

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rates have increased since we struck the agreement at 875 stevenson. so that's sort of where we're at, and why we're leaving. the other question is where we're going. so we have, at 875 stevenson street our repromail operations, treasurer tax collector, assessor, recorder, business property division, department of public works, bureau of street use and mapping, human resources, department of public works and general services agency, as well as city attorney's office claims division. all within the footprint of 875 stevenson. the majority of those folks would move to one location, 1155 market street where we have negotiated a new lease. 1155 market street was the headquarters location of the sf puc. so you may recall they occupied
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both that building and the building next door at 1145 market street. so there's no confusion i'll refer to 1155 as the headquarters location. that building is owned by the lors corporation although you see the agreement is with a limited liability company that is a subsidiary of lors corporation recently purchased within the last two years. we've negotiated what we think is a favorable agreement that is of a term of 10 years at 1155 market street. we do have the right to exit after five years, or after 92 months. so we have two opportunities to decide if there is a better location, or part of a greater plan to consolidate services, we have those exit opportunities from 1155 market street. the initial lease rate is $31.67 a square feet.
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that jumps in the second year to 39.14 a square foot and then 3% increases per year. the reason for the big jump between year one and year two is that year one is included a few months of what's considered free rent, and the ownership preferred to simply blend that benefit over the term of the first year. included with that rate is a tenant improvement allowance of $25 a square foot and then ability to amortize or pay for over time a 35 dollar square foot tenant improvement allowance over the initial 10 year term. the second entry agreement to cover the relocation of repromail which was sought to be an inappropriate use at the office building of is 155 market we were fortunate enough to find a location at the intersection of 12th street and south
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van ness, 110 12th street also has an address of van ness. it would be single use, a little over 10,000 square feet in size. we believe it's ideally situated to service our repromail operations, has a small parking area/yard and ability for adequate loading and very approximate access to the civic center which is the main client base for repromail operations. that particular lease is a 10 year lease as well, with an exit any time after five years. so we have a continual right to exit the property after the fifth year. the initial rate there is $30.95 a square foot per year. that increases 4% per year. the last one let me speak to briefly the exit from 875 stevenson street, the terms of
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that agreement are that the city completely vacate the premises by no later than february 4, 2013. which we are primed to do. if we accomplish that successfully, we will receive payment, over all, two different payments but a sum of 3,250,000. so that's the consideration for the early exit. there is some fairly intense calculations in your board package that shows that that compensation adequately covers our physical cost to move. it covers cubicle refinishing, new cubicle acquisitions were necessary although we're pretty much moving around our exiting furniture. we're trying to make this a green efficient relocation. and covers most importantly the differential in the rent. for the rest of this fiscal year and the full term of next fiscal year. so the budget impact of this move is deferred to fiscal year
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14-15. that's somewhat consistent with what we would have faced if we hadn't done this agreement. so but for this agreement we would remain at 875 stevenson street, where we do not have a renewal option, and in mai of 2015 we would have had to have found a location to move to. so we knew this day was coming. this accelerates that day but it brings to the table a fiscal partner to help ease the fiscal impact of the move. we speak to timing. so the reason this is before you, the nature that it is, as opposed to the normal course of a budget analyst review, budget and finance committee hearing, and then to the full board which frankly would have been my preference, is that we were squeezed, really, on both ends. so we had the ownership of 875 stevenson being very clear to us
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that that exit date of february 4 was firm, there was no negotiating that. once we negotiated the date we had, there was no extension possible. and there is a fiscal penalty for every day delay of our exit in this agreement. we will receive less money from shornstein for every day of delay. so if we leave on february 5, that will cost the city $10,000 in reduced revenue from that $3.25 million. it's $10,000 a day for the first week, $20,000 a day for every week thereafter. so clearly there is motivation for us to be timely in our exit. secondly, on the entry, there's only so many days between now and february 4, plus we have -- the worst time of the year to put this all together, during the holiday season. so when the construction schedule was coming together, many of these things working in
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parallel, we found that, because of the one week window next week, where we do not have a board meeting, that one week was absolutely critical from a standpoint of ordering furniture and other expenses that the landlord will front as is typical in a landlord-tenant agreement. the landlord will front money on an executed lease, but not on a non-executed lease. so reasonably so, we needed to get this item to this board to see the lease approved before further expenditures would be made by the landlord on our behalf, or really on their behalf in order to secure us as a tenant. so i hope that helps give a little perspective as to the timing. certainly happy to answer any questions you may have about any one of these three agreements. thank you for your time in allowing this process to go as it has. >> president chiu: colleagues, any questions to department
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staff? supervisor kim. >> supervisor kim: thank you. i had one quick question. this is the second time i've seen, in the lease, us using kind of a landlord advances to front the tenant improvements at an 8% enterrate. being that we're seeing this over and over again i think several of my colleagues has said this is very high if we do choose to participate, and this came up with the department of environment. i was wondering if the department of real estate is thinking in the future, if there are other ways that we can borrow money for these tenant improvements at a lower interest rate. >> well, that's a very good question, and it's timely. because we are seeing this more and more frequently. and the reason we're seeing it more frequently is that the market is changing and there is less of an allowance provided by landlord than there was when the market was softer. so as this market continues to heat up there is less advantage to a tenant. and because of that, then we have to amortize our improvement
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costs. the challenge we have is each one of these individual deals is have fairly small so we're not talking about a large sum of money which we would normally think of in terms of a certificate of participation, or other fiscal mechanism we might have to borrow funds at very competitive rates. so we're in a market just like any other tenant is in the market. and what landlords will charge is in this 8% range. we do our best to negotiate something lower but that's where the market stands. i've talked to -- about this concept of could we find a different mechanism to self-finance improvements. we have found where new york city did accomplish that, but it's on a much grander scale. so if there is the possibility perhaps to bundle properties, that might get us enough heft of what we want in debt, and perhaps get a decent return but
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for small agreements it's very difficult to do anything other than what we're presenting to you at this 8% rate. we are -- i do want to make mention though that our rough order of magnitude budget at this point has us considerably below what our availability of funds is at 35 a square foot, we're probably 80% of that and we're seeing already value engineering opportunities where that number will only go lower. but in abundance of caution we're providing you numbers that assume full amortization of the entire 35 a square foot. >> president chiu: supervisor campos. >> supervisor campos: thank you, mr. president. thank you for your presentation. just a quick question, just an informational question. there is a way to keep track of how much the city is spending on these kinds of improvements, collectively? i don't know how many of these deals we have, where we're
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actually, you know, paying or borrowing the money at this interest rate. but to the extent that the individual agreement, you know, is de minimus in terms of the amount, it might be useful to just keep track so that we at least can consider different ways of dealing with them collectively. >> that's an excellent idea. i'm sure we can work with the controller's office to put together a working matrix as we go forward. >> president chiu: any additional question to city staff? thank you very much. let me ask if there are members of the public that wish to speak on this item. seeing none, public comment on this item is closed. and colleagues, unless there is further discussion, this hearing has been held, and i will close it and file it. and we have in front of us items 9, 10, 11. why don't we -- unless there are additional comments, let's take
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the items in order. madam clerk, could you call the roll on item 9. >> the clerk: supervisor cohen, aye. supervisor elsbernd, aye. supervisor ferrell, aye. supervisor kim, aye. supervisor mar, aye. supervisor olague, aye. supervisor wiener, aye. supervisor avalos, aye. supervisor campos, aye. president chiu, aye. supervisor chu, aye. there are 11 ayes. >> president chiu: the resolution is adopted. item 10. >> clerk calvillo: item 10, supervisor cohen -- >> president chiu: why don't we do this same house, same call. without objection this resolution is adopted. item 11, same house, same call. without objection this item is adopted. madam clerk, could you please read the in memories. >> clerk calvillo: today's meeting will be adjourned in memory of the following individual, on behalf of
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supervisor carmen chu for the late esther -- >> president chiu: any more business in front of the body? >> clerk calvillo: that concludes our business for today. >> president chiu: thank you, ladies and gentlemen. this meath i -- meeting is adjourned. >> san francisco mayor lee is here to join us. this is
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especially special for us. about 14 months ago when we kicked off our first program lee was here. he helped cut the ribbon and launch with our first companies about 14 months ago, and i one thing i will say before you get up we thought long and hard where we wanted green star located and we knew we wanted it in silicon valley and we wanted to know where they were going to and we believe san francisco is on the way to being the heart and hub of silicon valley and where the heart and the leadership is and we will exciting where it's going and please welcome mayor ed lee. >> thank you mitch. thank you so much. you know innovation
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is infectious. it's as infectious as giants fever. how about that? so let me tell you i have been excited ever since i came here and cut the ribbon with mitch a year ago and want to the get back here and see how everything was progressing and guess what? just over a year and a half ago when we first started here and when i started as mayor san francisco unemployment rate was 9.6% and last week six-point 9%. what a flip and a lot of it has to do with all the job creation you're doing right here and i want to congratulate you green start and all the companies starting out here. i like to be next and involved with all of the innovation going on. that is really infectious and i really like that with this city. because there are 208 clean
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tech companies in san francisco and there are 83 investors and i think they're all here today. i think we earned the title of north american clean tech group and part of my administration that we support you and we engage with in how to do it better and you're part of my 17 points of job growth in the city. i ran on that as the new mayor in town. by the way i never have ran for public office before so you need to help me look good. i know they're going to work and as mitch said we are the ecosystem. this is how things are happening. this is why people are coming into san francisco. in addition we have a tourist sector going on, life sciences going on. everybody is innovating in the right places and doing it here in san
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francisco and there is a strong spirit and we will continue growth and jobs everybody. we want to help everybody out and support each other and that comes to what we do here in san francisco. today i am announcing a new initiative and clean tech sf initiative which we launching with all of you. there are three part it is of this. the first part is we're working with the california clean energy fund. i know jeff anderson is here today as part of them and he's going to be partners with us, and he's partners in every branch that we doing. the first thing we're doing as clean tech sf we will establish innovation zones in san francisco. what does that mean? we asked last time when we were here in san francisco and how can we help? perhaps we can help with the resources
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that the city doesn't use to the highest use. let's take our space. we have a lot of assets under utilized. how can we allow the demonstrations that you're having today have a real field test for what they are, and if we could allow ourselves to be very flexible with our leases, our spaces we will allow ourselves to do that with partnership with green start and incubate some of the demonstrationos our property, let's take what we're doing specifically. with our sfpuc, with the department of the environment and melanie is here today and doing a great job with our mos connie center and i know we have a lot of panels up there already but doesn't fill all the roof tops and there is new technology coming out all the time. we have been challenged in the solar technology arena
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because traditional technology has heavy weight technology that always challenged the integrity of roof tops, and moscone is the one we found and let that be for one of these companies and light ultralight technology and use, cheaper way of getting solar out there and we're going to allow them to demonstrate their product on top of our mos connie roof and that is an example we're doing in utilizing all of the agency's cooperations and make sure the start ups can use real testing sites in the city. that is thanks to the hardand kelly and the manager at puc and barbara hale and the second thing we're going to do is take a page out of what we're doing with clean tech and biotech
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life sciences. you see what mission bay is doing. they have for the last ten years building up a ecosystem of pharmaceutical companies and san francisco medical center and integrated around with the research teams to form a very strong research center and because of that center more and more companies around the world are locating there because they want to be next to the laboratory innovators. they're sharing laboratories, sharing scientists and collaborating and all with solutions about the future of medicine. taking a page out of that why couldn't we do the same thing with clean tech? we want to invite institutions like our california puc, our san francisco puc, our department of the environment, organizations and private institutions like sun run or pg&e to potentially
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create the network of their innovative sites and their innovative divisions to work together and potentially in a physical location or just begin networking first, and start working with the major universities and their research entities on their sites so we can start anchoring these institutions within san francisco and create another ecosystem of anchoring institutions. that proved successful in the delivery of pharmaceutical answers to medical challenges. i think it will prove to be helpful here to have them focial exciting center to come and look at and draw the attention i think of even more start ups, and the third part of this clean sf initiative is make sure that we do everything possible to support clean tech start ups. we can do that with
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partnership with the clean energy fund and our departments and their funds for grants and help green start with all of these start ups and make sure they know we're supporting them in every way possible, and through that partnership we will come up with even more ideas. this continues to be the innovation capital in the world and i will put that in context and melanie asked me to remind all of you. there is no other city in the united states if not the world that can say they accomplished goals of 80% of all of our garage is being repsyched in san francisco. we will get to 100% in our lifetimes and this i grant you because we have innovators here and people committed. we have investors here to help us with the new ideas. this last 20% of recycling is going to be the hardest but the most enjoyable. this city will continue to
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innovate. we will embrace clean technologies. we we will certificate green start and demonstrations that we will see today and october is innovation month and gratifying for those and happy clean tech day in san francisco. thank you very much. [applause] >> it is awesome to have the mayor announce that right here at green start. we are thrilled to be a part of that. it's true a year ago mayor lee asked "what can we do to help?" and we said we have lots of companies that want to test pilot things and deploy things and how can san francisco be a part of that and to see this come together so quickly is incredibly rewarding and testament to the leadership
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you're providing and san francisco is lucky to have you as our mayor. thank you >> when the new california academy of sciences opened in 2008, it quickly became one of the top tourist magnets in the city. part of the cal academies' astronomical success is the weekly nightlife party. >> i am joined by helen, who is here to school me on all the nocturnal activities that are getting ready to take place here. tell us a little about what we can expect to see at nightlife. >> we open up the doors every thursday night at the california academy of sciences. there are certain things you can see every week you can go to the museum, visit the planetarium, and we bring in bars and a
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deejay or band. it is a different feel from during the day, something different every week. tonight , we have beer and music. -- tonight we have great beer and music. it is beer week. we have a dozen local brewers in african hall. we have a deejays to set up throughout the museum and a live performance at 9:00 p.m. tonight. >> what has been your favorite part as a participant or as an observer? >> my favorite part is to walk around the aquarium in to see people with a drink in their hands, getting to know maybe somebody new, may be looking for a day, or chatting with friends. there jellyfish. i mean, they are beautiful. >> the culmination of the animals. >> it is very impressive. we do not have this at home. >> tell us a little about some of the spider's we see here on
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display. >> at the california academy of sciences, there is a very large collection of preserved and live specimens, which are the evidence about evolution. we have the assassin spiders, which are spiders that exclusively kill and eat other spiders. they are under the microscope here. research done and the california academy's i rhinology lab suggests that the assassin spiders have been doing this for over 150 million years. this glassed in room is a real scientific laboratory, and the people in that room are preparing specimens of vertebrate, that is mammals and birds. the way they do this is to remove the skin, sew it together in a relatively lifelike pose,
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and ensure that it does not decompose. >> i am a really big class actress fan, so i am here to see them, and beer week. >> i wanted to learn something and have fun. >> i always enjoy it. i am not all is well -- always working as i am tonight. sometimes i come to enjoy the music and to dance. ♪ >> culturewire covers the arts in san francisco, and one of my favorite culture artists is here tonight. jason, thank you for being on culturewire. tell us about some of your posters that we have here today. >> most of the posters here are four specific shows or tours. i am hired by the bands or the venue. >> what is the inspiration behind these posters? >> no, disease of the related to
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the bay and, of course. music -- it is related to the band, of course the musical content or isn't related to the bed. album covers can come from anywhere. ♪ ♪ >> class actress was great. we have been having so much fun. i did not realize how beautiful the cal academy looks than that. what other events take place here? >> we do corporate events that night on a regular basis. but nightlife is your best bet
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to come in as a regular person pharmacy the academy at night, and visit with friends. calacademy.org/nightlife. we have details for the next few weeks. you can get tickets online in advance or at the door. >> thank you so much. thank you for watching culturewire on sf gov tv. culturewire on sf gov tv. [horns honking] [siren wails]